In boost to sugar mills, the government on Thursday approved provision of additional funds for the cash-strapped millers. The government gave nod to Rs 2,790 crore interest subvention for extending loans by banks to sugar mills, Finance Minister Arun Jaitley said.
The approved amount is in addition to Rs 1,332 crore already approved by the Cabinet Committee on Economic Affairs (CCEA) in June last year.
It comes days after the government last month hiked the minimum selling price (MSP) of sugar by Rs 2 per kg to Rs 31, implying the sugar mills cannot sell the sweetener below Rs 31 per kg.
The recent moves by the government are expected to boost the liquidity of cash-strapped millers and help clear mounting cane arrears of around Rs 20,000 crore. The arrears of sugarcane farmers stood at around Rs 20,000 crore as of January-end, according to industry body ISMA.
The CCEA chaired by Prime Minister Narendra Modi also approved allocation of additional funds to the tune of Rs 3,355 crore to boost ethanol production, Arun Jaitley added.
The government also gave nod for delegation of alternative mechanism in all the cases of strategic disinvestment of CPSEs where CCEA has given ‘in principle’ approval.
The cabinet also approved recommendations of a group of ministers (GoM) relating to stressed power projects including grant of coal linkage for short-term power purchase agreements (PPAs).